Offshore Oil and Gas Decommissioning GOM
Oil and gas companies with offshore infrastructure must decommission it when it's no longer useful—by plugging wells and removing platforms within set deadlines. As of June 2023, more than 2,700 wells and 500 platforms were overdue for decommissioning in the Gulf of Mexico. Delays can increase environmental, safety, and financial risks. For example, delays could indicate that companies are in financial trouble and may leave the government to pay for decommissioning. The Department of the Interior only holds about $3.5 billion in bonds from companies to cover a potential cost of $40-$70 billion.
The Department of the Interior's Bureau of Safety and Environmental Enforcement (BSEE) does not effectively ensure that industry operators meet decommissioning deadlines for offshore wells and platforms at the end of their useful lives. BSEE's administrative enforcement tools and its use of them are ineffective at incentivizing noncompliant operators—for example, citations for regulatory violations and orders to comply are essentially warnings. BSEE rarely takes more punitive actions such as issuing civil penalty fines, which can take years, or disqualifying operators, which has unclear trigger criteria. Long-standing uncertainties in the enforceability of some deadlines also undermine BSEE's effectiveness for idle infrastructure on active leases and end-of-lease infrastructure in the Pacific. These enforcement issues have contributed to widespread decommissioning delays that have grown into a substantial backlog. For example, for Gulf leases that ended in 2010 through 2022, operators missed BSEE's 1-year decommissioning deadline for more than 40 percent of wells and 50 percent of platforms—many of which still have not been decommissioned. Over 75 percent of end-of-lease and idle infrastructure in the Gulf was overdue under BSEE's deadlines as of June 2023—over 2,700 wells and 500 platforms.